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Sovereign Funds Become Big Speculators
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Issue
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| Contributor | ArmyDem |
| Last Edited | ArmyDem Aug 12, 2008 01:12pm |
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| Category | News |
| Media | Newspaper - Washington Post |
| News Date | Tuesday, August 12, 2008 07:00:00 PM UTC0:0 |
| Description | Pools of Foreign Wealth Move Into Commodities
By David Cho
Washington Post Staff Writer
Tuesday, August 12, 2008; Page D01
Sovereign wealth funds, the massive investment pools run by foreign governments, are now among the biggest speculators in the trading of oil and other vital goods like corn and cotton in the United States, according to interviews with brokers who handle their investments at leading Wall Street banks, veteran traders and congressional investigators.
Some lawmakers say the unregulated activity of sovereign wealth funds and other speculators such as hedge funds has contributed to the dramatic swing in oil prices in recent months.
The agency regulating the market said it had not picked up on this activity by sovereign wealth funds. In a June letter, the Commodity Futures Trading Commission told lawmakers that its monitoring showed that these funds were not a significant factor in commodity trading.
But the CFTC is not detecting the growing influence of foreign funds because they invest through Wall Street brokers known as "swap dealers" who often operate on unregulated markets, sources familiar with the transactions said.
Several Democrats said the Republican-led CFTC won't use its authority to clamp down on such unregulated activity because it doesn't want to hurt the influential Wall Street firms it favors. |
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